Dual licensing in open source software markets
AbstractDual licensing has proved to be a sustainable business model for various commercial software vendors employing open source strategies. In this paper we study the main characteristics of dual licensing and under which conditions it represents a profitable commercial strategy. We show that dual licensing is a form of versioning, whereby the software vendor uses the open source licensing terms in order to induce commercial customers to select the proprietary version of the software. Furthermore, we show that the software vendor prefers dual licensing to a fully proprietary strategy when the customers are very sensitive to the reciprocal terms of the open source license.
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Bibliographic InfoPaper provided by Department of Economics, University of Trento, Italia in its series Department of Economics Working Papers with number 0718.
Date of creation: 2007
Date of revision:
Open source software; dual licensing; copyright; versioning; forking.;
Other versions of this item:
- L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
- L17 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Open Source Products and Markets
- L86 - Industrial Organization - - Industry Studies: Services - - - Information and Internet Services; Computer Software
- D45 - Microeconomics - - Market Structure and Pricing - - - Rationing; Licensing
This paper has been announced in the following NEP Reports:
- NEP-ALL-2007-08-08 (All new papers)
- NEP-INO-2007-08-08 (Innovation)
- NEP-IPR-2007-08-08 (Intellectual Property Rights)
- NEP-NET-2007-08-08 (Network Economics)
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